People vs. power in Silicon Valley

Electricity, housing demands spark odd alliances

January 25, 2001|By Scott Calvert | Scott Calvert,SUN NATIONAL STAFF

SAN JOSE, Calif. - A few shacks and old cars dot the brown landscape around Tulare Hill. Cows graze languidly nearby. The 350-foot hill itself is scarred by rows of high-voltage transmission lines that are part of a network running from Canada to Mexico.

The 14 acres at the hill's base don't look like much, but this site in Silicon Valley is ground zero in a fierce battle over a proposal to build a $400 million power plant that would serve the electricity needs of every home in San Jose and help satisfy the voracious energy needs of chip-makers and so-called "server farms."

The fight has taken on new relevance as Silicon Valley - the center of the nation's high-tech industry - grapples with a statewide energy crunch. Rolling blackouts rippled through California during the past week, and the state's two largest utilities have a $12 billion deficit and are on bankruptcy's doorstep because state law prevents them from passing their soaring wholesale electricity costs on to consumers.

The power plight has been exacerbated, experts say, by California's failure to build enough power plants during the 1990s - a time when the population swelled and Silicon Valley's energy-intensive operations multiplied. The state today imports 25 percent of its power.

Selecting a site for a power plant often pits utility against community, but this one has produced odd bedfellows. Furious neighbors have found a potent ally in technology giant Cisco Systems Inc., which plans to build a campus for 20,000 employees near the plant site, on the last major undeveloped swath in San Jose. Cisco doesn't want plant emissions wafting over its 688-acre site in an area known as Coyote Valley.

The Sierra Club, meanwhile, not only opposes Cisco's venture because of the automobile exhaust it would create, but the environmental group favors the power plant because it would use relatively clean-burning natural gas. Critics have accused San Jose-based Cisco of not-in-my-backyard politics and note that its operations - making the switches and routers that run the Internet - consume vast amounts of power.

So far, Cisco and the neighbors are winning, aided by Mayor Ron Gonzales. The San Jose City Council voted 11-0 in November to deny a key zoning change. And while the California Energy Commission can overrule the city, it has vetoed local government only twice before.

The plant's developers, San Jose-based Calpine Corp. and Bechtel Enterprises Inc., have tried to use the electricity crisis to create a sense of urgency. "Once this plant comes on line, this city is not going to black out," said spokeswoman Lisa Poelle.

Local opponents are quick to note that even if work began right away, the plant could not come on line before 2003. By then, projections show, plants that have cleared the thicket of regulations and are now in the pipeline around the state will be producing enough power to meet California's rising energy demands.

In all, seven plants with a capacity of 4,320 megawatts - the rule of thumb is 1 megawatt will power 1,000 homes - are under construction. Another 14, including the proposed Tulare Hill project, are in the licensing process.

The question is not just one of overall energy supply but whether Silicon Valley should help shoulder the burden to produce the juice that is its lifeblood. The San Jose Silicon Valley Chamber of Commerce - whose members included Cisco and Calpine - has come out in favor of the plant for that very reason.

"We can't be so arrogant to say we want Silicon Valley here, but we want power to come from 200 miles away," said chamber President Steve Tedesco.

Silicon Valley's thirst for electricity shot up during the late 1990s economic boom. In 1994, the region used a peak of 2,337 megawatts; last year it reached 2,967. The increase is enough to power more than 600,000 houses. And the new, 600-megawatt plant will come close to closing that energy gap all by itself.

"Does that make your eyes blink?" said Pacific Gas & Electric Co. spokesman Scott Blakey.

The power thirst is only going to get harder to slake. Blakey said a factory making computer chips needs more electricity than an automobile plant. Entities called "server farms" - or co-location facilities - have begun sprouting up in large numbers both here and in other parts of the country. They house banks of computer servers that resemble rows of crops and have voracious appetites for power, much of it just to keep machines cool.

A 200,000-square-foot server farm can gobble up as much energy as a city of 40,000 people, according to Ed Quiroz, a regulatory analyst at the California Public Utilities Commission.

To people living in the vicinity of Tulare Hill, all the energy demand in the world doesn't justify building a power plant so close to home.

The nearest neighborhood, Los Paseos, is barely a half-mile from the power plant site. From their $450,000 tract houses shoehorned onto small lots, residents could see the smokestack emissions, if not the 145-foot-tall stacks themselves.

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